Vijaya Bank approves merger with Bank of Baroda, Dena Bank

The Board of Vijaya Bank on Saturday approved the merger with Bank of Baroda and Dena Bank, as per a proposal made by the government earlier this month.

The state-owned lender's decision comes days after the Dena Bank gave its stamp of approval on the three-way bank merger.

"Pursuant to Regulation 30 of SEBI (LODR) Regulations, 2015, we wish to inform that the Board of Directors of the Bank at their meeting held today, that is, 29th September 2018 has considered and decided to give its "In-principle approval" for amalgamation of Vijaya Bank along with the Bank of Baroda and Dena Bank, in line with the Department of Financial Services, Ministry of Finance, Government of India proposal dated 17th September 2018 subject to all statutory/regulatory approvals," a statement from the bank read.

In a notification of exchanges, the bank stated that the "amalgamation would enable the creation of a bank with the business scale comparable to global banks and capable of competing effectively in India and globally".

Underscoring the fact that the amalgamation would lead to greater scale and synergy, the bank said that "it would lead to cost benefits, higher productivity and efficiency of the banking system as a whole. In addition, it would provide the impetus for building banks with scale, ramping up credit growth, adoption best practices across amalgamating entities for cost efficiency and improved risk management and financial inclusion through wider reach."

The merger of the three banks, which was decided by the Centre on September 17, will make the entity the third largest lender of the country after State Bank of India and the HDFC Bank.